The United States and Panama have reached a military cooperation agreement allowing US troops to conduct training exercises along the Panama Canal, though Panama has firmly rejected any possibility of permanent US military installations on its soil.
Quick Takes
- A new memorandum of understanding between the US and Panama permits American troops to be stationed at the Panama Canal for training exercises, but explicitly prohibits permanent military bases.
- Defense Secretary Pete Hegseth has suggested reviving former US military facilities in Panama, including Fort Sherman, Rodman Naval Station, and Howard Air Force Base.
- Panama’s government has unequivocally rejected the establishment of permanent US military bases, asserting its sovereignty over the canal.
- President Trump has taken a hardline stance, threatening to “retake control” of the canal if Panama doesn’t lower fees for American ships.
- The agreement comes amid US concerns about Chinese influence near the strategic waterway, which Panama and China have denied.
New Military Cooperation Framework
The United States and Panama have reportedly signed a deal allowing American troops to be deployed along the Panama Canal for joint training exercises. This memorandum of understanding aims to increase military cooperation between the two nations while respecting certain boundaries. The agreement permits US forces to operate in Panama for training purposes but explicitly prohibits the establishment of permanent American military bases in the country. This arrangement represents a significant development in US-Panama relations more than two decades after American forces withdrew from Panama in 1999 following the implementation of the 1977 treaty that transferred canal control to Panama.
Defense Secretary Pete Hegseth has outlined specific locations where joint exercises could take place, mentioning former US installations. “This memorandum of understanding will increase joint training exercises, operations and overall interoperability between our two forces, reestablishing rotational and joint presence at Fort Sherman, Rodman Naval Station and Howard Air Force Base. At Fort Sherman, reviving the Jungle School alongside Panamanian forces,” Hegseth stated. The timeline for potential troop deployments under this new framework remains unclear, though the agreement signals an intent to move forward with increased military cooperation.
JUST IN – Panama deal allows US to deploy troops to canal — The document, signed by top security officials from both countries, allows US military personnel to deploy to Panama-controlled facilities for training, exercises and a range of other activitieshttps://t.co/lCOAVmZbUA
— Insider Paper (@TheInsiderPaper) April 11, 2025
Panama’s Sovereignty Concerns
Panamanian officials have been quick to establish clear boundaries regarding their country’s sovereignty. Panama’s Security Minister Frank Abrego has emphasized the government’s position, stating: “Panama made clear, through President Mulino, that we cannot accept military bases or defense sites.” This declaration reflects Panama’s determination to maintain complete control over its territory while still engaging in military cooperation with the United States. The sensitivity surrounding foreign military presence stems from Panama’s complex history with the United States, including the 1989 US invasion to remove dictator Manuel Noriega.
The canal’s administration remains a key point of contention. The Panama Canal Authority (PCA) manages the waterway and maintains that all vessels must pay equivalent rates. Jose Ramón Icaza, a Panamanian official, indicated that while Panama is not offering free passage, they are exploring solutions: “We will seek a mechanism by which warships and auxiliary ships can have a compensation system for services, that is, a way to make them cost-neutral but not free.” This approach aims to balance Panama’s economic interests with maintaining positive relations with the United States.
Trump Administration’s Strategic Concerns
The Trump administration has expressed concerns about China’s influence near the Panama Canal, a crucial artery for global trade and US container traffic. President Trump has taken a particularly strong stance, threatening to retake control of the canal if Panama fails to lower fees for American ships. During his visit to Panama, Defense Secretary Hegseth addressed these concerns while attempting to strike a balanced tone regarding China. “We do not seek war with China. And war with China is certainly not inevitable. We do not seek it in any form. But together, we must prevent war by robustly and vigorously deterring China’s threats in this hemisphere,” Hegseth stated.
The US has also pressured Panama regarding the Hong Kong-backed Panama Ports Company, which Washington claims has not met contractual obligations. In what appears to be a response to these concerns, Hong Kong-based firm CK Hutchison, the parent company of Panama Ports, announced a deal to sell ports, including those on the Panama Canal, to a US-led consortium. However, the deal has since been put on hold by Chinese regulators.
